Four Valley cities are the fastest places to recoup solar installation expenses
Four cities in the Phoenix metro are the best places in the nation to quickly recoup the expenses of installing home solar panels, according to a new report.
It takes homeowners in Chandler, Avondale, Glendale and Mesa just around two years to make up the cost of a solar system installation through reduced electricity bills, according to an analysis by Market Watch. The average time nationally is eight years, Market Watch said.
Chandler led the way as the only city to beat the two-year line. Homeowners there need 23.3 months to offset their up-front solar expenses. In Avondale it takes an even 24 months, while it’s 24.5 months in both Glendale and Mesa.
The report used data from WattBuy, a company accredited by the U.S. Department of Energy.
Market Watch said the Valley cities made the list because energy bills are high in the Grand Canyon State, with the use of central air conditioning higher there than in almost any other state, according to federal statistics. Savings on power bills are helped by 300 days of sunshine each year in the Sonoran Desert, the report said.
“These Arizona cities made our top 10 list primarily due to the state’s high energy bills — your power bill savings can be used towards paying off your system over time — combined with the large amounts of sunlight the state receives,” Market Watch’s report said. “The use of central air conditioning units is also higher in Arizona than almost any other state, pushing energy bills up to an average of well over $600 a month, according to our findings.”
Arizona is also installing more solar panels than most states.
A recent market insight report by the Solar Energy Industries Association and Wood Mackenzie ranked Arizona ninth in the nation for photovoltaic solar installations in 2023, saying the Grand Canyon State added 861 megawatts to the electric grid, marking a 25.7% increase over 685 megawatts that came online in 2022.
Arizona now has a total solar capacity of 6,457 megawatts — enough to power 1.2 million homes — and is projected to have 10,651 megawatts installed by 2028, according to the association. The state had 39,000 solar installations in 2023 for a total of 288,854.
New federal support for solar installation costs
Despite the four Valley cities’ quick cost makeup time, Arizona as a whole was not as dominant when it comes to the average time for a solar panel installation to pay for itself. It takes an average of 8.7 years to do that in Arizona. Ten states take less time than that: Hawaii (2.8 years), California (4.5), New Hampshire (6.0), Nevada (6.3), Rhode Island (6.5), Connecticut (7.1), Maine (7.1), Massachusetts (7.4), Colorado (8.5), Texas (8.6).
Residents in some of those states, such as California, benefit from lower solar installation costs. Arizona’s average installation cost of $15,180 ($10,626 after the 30% federal solar tax credit) is only slightly higher than California’s.
When it comes to installation costs, thousands of Arizonans will be able to benefit from new federal assistance announced just this week. The Arizona Governor’s Office of Resiliency said it was awarded $156 million from the EPA’s Solar for All grant program. The money is meant to improve access to rooftop and neighborhood-scale solar energy in the state, starting by the end of this year.
The money is part of a $7 billion nationwide investment, funded by the Inflation Reduction Act, that is aiming to help 900,000 low-income households install rooftop solar.
“Solar for All Arizonans is a critical program that will lower energy costs for thousands of Arizonans,” said Gov. Katie Hobbs in a statement. “In addition to directly providing Arizona families with clean, affordable electricity, Solar for All Arizonans will open new opportunities for our home grown solar industry, and create good-paying jobs in communities all across the state.”